Palmeiras face losing youngster Diego Souza on free as talks stall

Palmeiras could be set to lose one of their best young talents on a free transfer in August, as talks over a new deal for attacking midfielder Diego Souza once more failed to reach a resolution.

Diego, 20, has been a star of the club's youth team for the past few seasons and, in 2012, made the step up to first-team football for the Verdão.

However, with his contract set to expire on August 22 this year, it would appear that his long-term future may lie elsewhere if a deal cannot be struck between the club and the player's representatives—who both own 50% of his economic rights—in the near future.

At present, with less than six months left on his contract, the player is free to sign a pre-contract agreement with any other side.

“We have interest in renewing, as with the other kids,” said executive director José Carlos Brunoro. “The problem is that we will not pay absurd amounts to players who are yet to prove that they are stars.

“We are entering into a new philosophy and it does not help if a player who is not a star already earns the money of a star. It's a financial negotiation and there is a difference in figures.”

Thus far in 2013, Diego and several other highly rated members of the Palmeiras youth team have been training as part of the first-team squad. They are, though, yet to make their first appearances of the campaign.